Commonwealth Indigenous-specific expenditure 1968-2006

Introduction

This Background Note presents graphs, tables and commentary on the subject of identifiable Commonwealth expenditure in the area of Indigenous Affairs expenditure which we have termed Indigenous-specific as, although it may come through any portfolio, it is always through programs or program components specifically addressing Indigenous issues or needs.

Links to tables will open the relevant table in an Excel spreadsheet. All of the tables and charts referred to are in this one spreadsheet and they can be accessed via the tabs along the bottom of the screen in Excel. There is no need, therefore, to return to this page to access another table.

Historical overview

Identifiable Commonwealth expenditure in the area of Indigenous Affairs began with the establishment of the Office of Aboriginal Affairs soon after the landmark referendum in 1967. It was relatively low in the first few years but increased significantly with the creation of the Department of Aboriginal Affairs soon after the Whitlam Government came to office in December 1972, and continued to grow through the 1980s.

In 1990 the Department was replaced by the Aboriginal and Torres Strait Islander Commission (ATSIC) and, except for a slight dip in 1993 94, expenditure continued to rise throughout the 1990s. ATSIC expenditure as a proportion of total Indigenous expenditure started, however, to fall in the mid 1990s. This was a result of areas such as health and land acquisition being shifted out of ATSIC and some areas that remained within ATSIC receiving a funding cut following the 1996 Budget.

Although overall expenditure continued to rise from the late 90s onward, it is difficult to compare earlier figures with those from later years because in 1998 there was a move from cash to accrual accounting and from 2000 01 the annual Ministerial statements on Identifiable Commonwealth Expenditure on Indigenous Affairs used different categories for representing expenditure. Tracking expenditure becomes even more complicated from 2002, as successive administrative rearrangements led to the demise of ATSIC and the staged transfer of its funding and responsibilities through, and to, a range of other agencies.

The trend in expenditure

Converting the nominal expenditure to real terms(1) shows a rising trend over the period, which means that the increases in expenditure have been more than the increases in inflation (see Table 1 and Chart 1). In real terms, identifiable Commonwealth expenditure in the area of Indigenous Affairs saw a dramatic rise and fall in the early to mid 1970s falling from $909 million in 1975 76 to $575 million in 1978 79 and it did not then pass the 1975 76 level until 1983 84 ($924 million). The mid 1980s onwards has seen an almost uninterrupted rise in real expenditure, apart from small and quickly recovered drops in the mid 1990s and 2005 06.

Identifiable Commonwealth Indigenous-specific expenditure expressed as a percentage of total Commonwealth expenditure shows a similar pattern of growth. The mid 1970s saw a sharp increase followed by a sharp fall, then followed by almost continuous growth from 1978 79 to now (see Table 1 and Chart 2). In 1968 69 identifiable Commonwealth Indigenous-specific expenditure accounted for only 0.18 per cent of total Commonwealth expenditure. This rose to an estimated 1.58 per cent in 2006 07.

Plotting identifiable Commonwealth Indigenous-specific expenditure as a percentage of Gross Domestic Product (GDP) shows a pattern in recent years different to the indicators discussed above. From the early 1990s Indigenous-specific expenditure as a percentage of GDP has stabilised at around one third of one percentage point and, therefore, does not show the continuous rise as seen in real expenditure and as a percentage of total Commonwealth expenditure. Essentially this can be explained by the economy (measured by DP) growing at a faster rate than total government expenditure (see Table 1 and Chart 2).

Per capita expenditure

There are two possible sets of Indigenous population data that per capita expenditure figures can be derived from, and both are problematic.

Five yearly Census data covers the whole of the period of Aboriginal Affairs expenditure. However Census counts are not considered a reliable indicator of the true size of the Indigenous population over this period (the data show periods of low and high growth which cannot be accounted for by births and deaths). As such, the per capita expenditure figures which are derived from these data and presented in Table 1 should be used with caution. In particular it is strongly advised that these figures not be used for an analysis of trends over the period.

The ABS has used data from the 2001 Census to produce estimates and projections of the Indigenous population which are considered more reliable than the Census figures, but which only cover the period 1991-2009. Furthermore, because of the difficulty in predicting the Indigenous population, both high and low projections were produced from 2002. For the period covered, and regardless of whether high or low projections are used, these data again show a rising trend in per capita identifiable Indigenous specific expenditure, though yearly fluctuations are quite volatile (see Table 2 and Chart 3).

Further complicating the task of estimating per capita expenditure is the fact that a lot of Indigenous-specific expenditure has not been simply 'on top of' that which Indigenous Australians might benefit from by being Australians. A large proportion of it has substituted for expenditure through mainstream assistance programs (e.g. Community Development Employment Projects for Newstart, Community Housing for housing under the Commonwealth-State Housing agreement, Aboriginal Legal Aid for general legal aid, Aboriginal Medical Services for Medicare supported services). A further amount has been for services which are arguably the responsibility of other levels of government (e.g. State or Local). At the same time, Indigenous Australians have often utilised mainstream services and benefits at a lower rate than other Australians (e.g. Pharmaceutical Benefits and Aged Care).

To produce meaningful per capita expenditure figures, detailed consideration-filled studies of single-portfolio areas need to be conducted. Some examples of such are:

Sources

Compilations of Commonwealth Indigenous-specific expenditure data

Expenditure data for late 1960s to late 1980s can be found in Appendix 15 of the Aboriginal Affairs Department, 1988-89 Annual Report, and in J.C. Altman and W.Sanders, From exclusion to dependence: Aborigines and the welfare state inAustralia, Discussion Paper No. 1/1991, Centre for Aboriginal Economic Policy Research.

In 1991 and 1992 expenditure tables were included in the Budget Related Paper No.7, Social Justice For Indigenous Australians, circulated by the Hon. Robert Tickner, Minister for Aboriginal Affairs and Minister assisting the Prime Minister for Aboriginal Reconciliation).

From 1993 and 1995 expenditure tables were included in an annual, but no longer officially Budget Related, Social Justice For Indigenous Australians, circulated by the Hon. Robert Tickner, Minister for Aboriginal Affairs.

There was no equivalent compilation released in 1996 or 1997, but in 1998, Senator Herron, Minister for Aboriginal and Torres Strait Islander Affairs, released Commonwealth Programs For Aboriginal andTorres StraitIslander Peoples 1995-1996, and Addressing Priorities in Indigenous Affairs an expenditure compilation that also included actual expenditures for 1995-96 and 96-97 and estimates for 97-98 and 98-99.

From 1999 to 2002 the Government released at budget time expenditure compilations in the form of a series of Ministerial statements:

A Better Future for Indigenous Australians, Statement by Senator the Honourable John Herron Minister for Aboriginal and Torres Strait Islander Affairs, 11 May 1999 .

The Future Together, Indigenous-Specific Measures in the 2000-01 Budget, Statement by Senator the Honourable John Herron Minister for Aboriginal and Torres Strait Islander Affairs, 9 May 2000.

From 2006 there has been no single cross-portfolio compilation of Indigenous-specific Commonwealth expenditures. Instead portfolio specific summaries of Australian Government Indigenous Expenditure (AGIE) have been included in nearly all the annual Portfolio Budget Statements.

TotalCommonwealthexpenditure data

[1] The nominal expenditure (what is spent each year) adjusted to remove the effect of inflation and expressed in 2006-07 dollars using the Implicit Price Deflator (IPD) for Non-Farm GDP. Essentially these figures are the expenditure of previous years expressed in current dollars, enabling a more useful comparison over time.

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